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TMI Blog2014 (4) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 78 apart from a penalty of Rs. 1,000/- under Section 77 of the Finance Act, 1994. In addition, a penalty not exceeding the service tax demand confirmed has also been imposed under Section 76 of the Act. The period of demand is July 2003 to May 2006. Aggrieved by the same, the appellant is before us. 3. The learned Counsel for the appellant made the following submissions. 3.1 The Passenger Service Fee is collected under the provisions of Section 22 of the Airport Authority of India Act, 1994, for the amenities given to the passengers and for security services provided at the airport. Therefore, it is in the nature of a statutory fee. The Airport Authority of India were authorized to levy the fee. The Airport Authority of India were authorized to levy the fee. The appellant was directed to collect these charges from the passenger vide Circulars issued in this regard. The appellant had no choice but to collect these fees and remit the same to the Airport Authority of India. In that sense it is not a service rendered by the appellant but a compulsory activity. He further submits that if the passenger fee collected by the appellant was remitted within a period of 15 days, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the Revenue on the other hand strongly refuted the contentions raised by the appellant. He points out that the appellant themselves admitted that with effect from 01.06.2006 they have rendered the services of Business Support Service. In other words the appellant admits that they have rendered a service, therefore, for the period prior to 01.06.2006 it cannot be said the activity undertaken by them is not a service. The only issue required to be seen is that whether it is a taxable service as defined in law. As per the Explanation to Section 65(19) relating to Business Auxiliary Service, if any person collects payments of sale price of goods or services for another person, they would be covered under sub-clause (vii) of Section 65 (19) as commission agent's service and, therefore, the definition of BAS is more specific to the activity undertaken by the appellant. Hence the service rendered by the appellant to the Airport Authority of India is rightly classified under BAS. 4.1 It is further contended that the explanation only clarifies the position of law as it stood. It does not extend the scope of the service. Therefore, it should be held as retroactive and would appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incidental or auxiliary support service, such as billing, collection or recovery of cheques, accounts and remittance, evaluation of prospective customer and public relation services and includes services as a commission agent but does not include any information technology services." 6.2 The definition was amended vide Finance Act, 1994 and with effect from 10.09.1994 the definition stood as follows:- "Business auxiliary service" means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production or processing of goods for, or on behalf of, the client; (vi) provision of service on behalf of the client; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation.-For the purposes of this clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security;" 6.6 On perusal of the above legal provisions, it is clear that the collection of charges for the service rendered is more specifically covered under 'Business Auxiliary Service' and not under 'Business Support Service'. As per the Section 65A of the Finance Act, 1994, which deals with the classification of taxable services, sub-clause (105) of Section 65 which provides the most specific description shall be preferred to sub-clauses providing more general description. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s imposed under these sections are sustainable, subject to re-quantification of the amount of the service tax liability from the period w.e.f. 16.06.2005. As regards the penalty imposed under Section 78, it is settled position in law that the said penalty is imposable if any of the elements specified in the said Section i.e. fraud, collusion, suppression, willful mis-statement or contravention of any of the provisions of the law with an intent to evade payment of duty are present. In the present case, the appellant did not declare to the department the activities undertaken by them prior to 01.07.2006. It would therefore, amount to suppression of facts as held in the case of Neminath Fabrics - 2010 (256) E.L.T. 369 by the hon'ble Gujarat High Court. Therefore, penalty under Section 78 is rightly imposable. However, the quantum of penalty imposable would depend on the quantum of service tax liability on the appellant w.e.f. 16.6.2005. 7. Thus the service tax liability of the appellant has to be quantified for the period w.e.f 16.6.2005 and on such recomputed liability, the interest and penal liabilities would accrue. For this limited purpose, we remand the case back to the adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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